Harvey-damaged properties could be appraised 21 percent above pre-flood values in Harris County

FILE - In this Aug. 28, 2017 file photo, is a home surrounded by floodwaters from Tropical Storm Harvey in Spring, Texas. In 2018, Harris County lowered appraisal values as homes underwent repairs. Thursday morning, it announced that appraisal values would be raised to 21 percent above their pre-flood values. (AP Photo/David J. Phillip, File)

Photo: David J. Phillip, STF / Associated Press

The Harris County Appraisal District announced Thursday morning it could raise the appraised values for properties damaged during Hurricane Harvey by as much as 21 percent above pre-Harvey levels.

Many flood-damaged homes had their appraised values for property tax calculations lowered in 2018 as they repaired their homes.

Now those rates could be raised to their 2017 pre-flood values, plus a 10 percent increase per year, the maximum allowed by state law.

That means a home assessed at $300,000 before sustaining damage could now be assessed at $363,000 two years later - even if it had its appraised value had lowered to $150,000 as it underwent repairs in 2018. That scenario assumes the market value of the property had increased to $370,000. Not all flooded homes will experience these increases.

The district’s announcement came as many homeowners are awaiting their appraisals.

Ed Wolff, whose Meyerland home flooded in Harvey and twice before, questioned how HCAD could accurately assess the value of his home, which is now repaired and elevated.

“We don’t have enough data to know what a house that has had multiple floods is going to be worth,” Wolff said. “To say it’s worth what it was before Harvey is not correct.”

Jack Barnett, HCAD spokesperson, said staff appraisers went to every property that had its value lowered by flooding to determine if increases were warranted. Appraisers considered both the condition of the surrounding neighborhood and whether repairs were still under way.

“So if a house is still under repair for flooding on Jan. 1, we would be looking at the amount of repair work that had been done and completed at that point and basing the 2019 value on that,” he said.

State Sen. Paul Bettencourt, R-Houston, who authored recently passed legislation related to property tax relief, said many homeowners who have been able to remodel are generally improving the condition of their homes above what they were before Harvey. The appraisal district is likely basing the increases on repair estimates homeowners provided to the city.

“I’m afraid it looks like HCAD is blowing past the Harvey damage, but they may have a basis for it,” said Bettencourt, whose bill that would prohibit cities and counties from raising local property revenue collections more than 3.5 percent from one year to the next.

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Conversely, Tom Crawford, a second-generation property appraiser based in Conroe, said he believes the district isn’t taking into account how long it takes for the market to recover after floods.

After Hurricane Harvey, Crawford analyzed sales in River Plantation, a subdivision in the Conroe area just east of Interstate 45, comparing a small sample of homes that had flooded in the past with similar homes that had not. The results showed that homes that flooded lost about 20 percent of their value.

Crawford said even many properties that did not flood took a hit simply because of their proximity to those that did. He said he saw this, for instance, in the Creekside neighborhood of The Woodlands.

“Almost all the homes in Creekside did not flood,” Crawford said. “However, when the news comes out, they say Creekside. And it looks to me like, since Harvey, Creekside has been a bit more difficult in terms of marketability.”

Barnett, however, said he hadn’t seen the stigma of a badly flooded neighborhood cause home values to fall.

“That’s generally not something we have found,” he said. “Even in areas that have flooded, prices seem to have rebounded.”

He also said the reason many homes will have their values rise the full 21 percent is because market values have grown more quickly than appraisal values, which can only rise 10 percent a year, can keep up with. That can cause a backlog of increases until the appraisal value matches the market value.

Wolff said the appraisal district should have included information with its Thursday notice that homeowners can file a protest if they think their values are not accurate.

His mother’s Tanglewood-area house, which flooded during Harvey and has since been repaired, recently sold for 25 percent less than its pre-Harvey tax appraisal.

“I think that they would be better served by at least explaining that there is an appeals process,” Wolff said.

Bettencourt said the housing market appears to be rebounding faster than it has after any other Gulf Coast flood. He attributes the recovery to a strong market for homes that didn’t flood and the number of buyers who purchased and restored flooded homes.

“I think that this storm will be in the rearview mirror faster than any other,” he said, “even though it was the largest we’ve ever seen.”